We asked Karen Tobeck for her expert view and she gave us this advice. There are some benefits in putting the vehicles through the business.
To do this you need to:
- Purchase in the company name
- Insure as business vehicles in the company name (they can’t be personal vehicles for insurance if the company owns them)
- It would be best if any loans were in the company name as well
From this, the benefits are:
- GST on purchase claimable on buying the asset
- All running costs – Petrol, repairs, maintenance, insurance etc are paid by the company
- Depreciation is claimable by the company
The down side is:
- An FBT adjustment needs to be done annually – this is put through the books at year end as a book entry. No monies are payable to IRD.
We can run a sample calculation for you if you tell us the vehicle purchase costs and loan repayments. It will show the cost differential between owning in the company and owning it personally. Please contact Karen Tobeck on 09 273 3682should you require a calculation.